Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill consisted of the following:


(in thousands)	Local Media		National Media		Total

Gross balance as of December 31, 2019	$	1,143,859	$	318,734	$	1,462,593
Accumulated impairment losses	(216,914)		(21,000)		(237,914)
Net balance as of December 31, 2019	$	926,945	$	297,734	$	1,224,679

Gross balance as of September 30, 2020	$	1,120,729	$	318,718	$	1,439,447
Accumulated impairment losses	(216,914)		(21,000)		(237,914)
Net balance as of September 30, 2020	$	903,815	$	297,718	$	1,201,533

Other intangible assets consisted of the following:


(in thousands)	As of September 30, 2020		As of December 31, 2019

Amortizable intangible assets:
Carrying amount:
Television network affiliation relationships	$	616,244	$	616,244
Customer lists and advertiser relationships	102,900		104,300
Other	104,036		102,956
Total carrying amount	823,180		823,500
Accumulated amortization:
Television network affiliation relationships	(106,258)		(82,917)
Customer lists and advertiser relationships	(50,305)		(42,012)
Other	(34,166)		(23,811)
Total accumulated amortization	(190,729)		(148,740)
Net amortizable intangible assets	632,451		674,760
Indefinite-lived intangible assets — FCC licenses	349,915		385,915
Total other intangible assets	$	982,366	$	1,060,675

On April 4, 2019, we acquired assets from an independent station in Stuart, Florida, for $23.6 million in cash. The value attributed to the acquired FCC license totaled $19.2 million and $4.1 million of value was attributed to an other intangible asset.

Estimated amortization expense of intangible assets for each of the next five years is $14.4 million for the remainder of 2020, $55.3 million in 2021, $49.8 million in 2022, $44.3 million in 2023, $42.7 million in 2024, $40.0 million in 2025 and $386.0 million in later years.

Goodwill and other indefinite-lived intangible assets are tested for impairment annually and any time events occur or changes in circumstances indicate it is more likely than not the fair value of a reporting unit, or respective indefinite-lived intangible asset, is below its carrying value. Our reporting units are Local Media, Katz, Triton, Stitcher and Newsy. Such events or changes in circumstances include, but are not limited to, changes in business climate, declines in the price of our stock, or other factors resulting in lower cash flow related to such assets. If the carrying amount exceeds its fair value, then an impairment loss is recognized.

Weakness in economic conditions toward the end of the first quarter, reflecting the impact of the COVID-19 pandemic, and declines in our stock price, created indications of fair value declines for our reporting units as of March 31, 2020. Accordingly, during the first quarter, we considered impacts to the estimated fair values for each of our reporting units to determine if it was more likely than not that fair value had declined below carrying value. Our analysis primarily relied upon market data and discounted cash flow analyses. The use of a discounted cash flow approach requires significant judgment to

estimate future cash flows of the business and the period of time over which those cash flows will occur, as well as to determine an appropriate discount rate. While we believe the estimates and judgments used in the discounted cash flow analyses for our reporting units were appropriate, different assumptions with respect to future cash flows, long-term growth rates and discount rates, could produce different estimates of value. During the third quarter of 2020, we continued to evaluate changes in facts and circumstances and market impacts resulting from the COVID-19 pandemic, including their impact on operating results and whether it was more likely than not that fair values of our reporting units had declined below carrying value.

We concluded that it was not more likely than not that the carrying value for any of our reporting units exceeded its fair value. However, the discounted cash flow values for each of our reporting units are lower than the values determined during our 2019 annual impairment test. In 2019, the fair value for our Local Media reporting unit exceeded its carrying value by approximately 25% and our other reporting units exceeded their carrying values by over 30%. The Local Media reporting unit has $0.9 billion of goodwill or 75% of the consolidated total for the Company.

We have also concluded that it was not more likely than not that the carrying value of any of our FCC licenses exceeded their fair values. Our FCC licenses are indefinite-lived assets that are not subject to amortization. The value of a FCC license is estimated using an income approach, which requires multiple assumptions relating to the future prospects of each individual FCC license. While we believe the estimates and judgments used in determining that it was not more likely than not that the carrying values of the FCC licenses exceeded fair values were appropriate, different assumptions with respect to the income approach could produce different estimates of value. For example, as it relates to our 2019 annual impairment test, a 50-basis point increase in discount rates would reduce the aggregate fair value of the FCC licenses by approximately $65 million.